Episode 51: Safety Dance
This week’s news cycle was robust, from surprising CDC guidance to gas shortages in the Southeast, to a shake-up in the Republican leadership in the House, to over 1,800 rockets fired between Israel and various Palestinian militant groups. Whew, let’s dive in.
COVID
Mask(less)
The CDC announced surprising guidance that people who are fully vaccinated against coronavirus no longer need to wear masks while indoors and are safe to gather with groups of any size outdoors. The guidance still calls for mask-wearing in crowded indoor locations like public transportation and hospitals.
This guidance is excellent news, especially for close talkers. CDC Director Rochelle Walensky called the updated recommendation ‘an exciting and powerful moment, resulting from following the science.’ The problem is it’s old news, at least to rational people who have critical thinking skills. We have three vaccines (Pfizer, Moderna, J&J) that are all extremely effective against contracting coronavirus and passing it to others , plus it’s effective against all known variants. So why are vaccinated people still wearing masks? And, yes, it’s still possible to contract the virus after vaccination—a whopping ~0.008% of people (9,245 cases out of 117 million fully vaccinated individual cases) fall in this bucket, and they experienced either mild or no symptoms. Yet, President Biden, who was immunized six months ago, has consistently worn a mask. During the last presidential address, both Kamala Harris and Nancy Pelosi donned masks for the duration of Biden’s speech. For many, this gave the impression that either (1) the vaccines don’t work or (2) there’s little benefit to getting one, at least regarding mask-wearing and social distancing. I understand that a health organization like the CDC needs to be conservative, given coronavirus is new with many unknowns. However, our government’s health cognoscenti have exhibited an awkward safety dance over the last three months, which feels political.
Still, let’s try and celebrate good news when we get it. As of this week, more than 150 million Americans age 18 and older have received at least one dose, according to the CDC. The data shows that 35.4% of Americans are fully vaccinated, and 46.4% have received at least one dose. The CDC recommended on Wednesday, after a 14-0 vote of support (with one abstention) from the Advisory Committee on Immunization Practices, expanded usage of the Pfizer vaccine for 12-15-year-old kids. Two days earlier, the FDA approved Pfizer’s request to allow their shot to be given to young teens on an emergency use basis. From a pool of 2,000 children in the clinical trial, there were no serious adverse events associated with the Pfizer shot, so the vaccine is 100% effective with this age group. Most vaccine recipients, 91%, experienced a mild side effect, typically after the second shot. The most commonly reported side effects were pain at the injection site and joints and muscles, fatigue, headache, chills, and fever. Vaccinating children is crucial to ending the pandemic, as children make up around 20% of the total US population of 331 million. Research suggests that only about 50% of parents want their kids vaccinated. Reasons for not getting the shot include safety concerns, the time it took to develop the vaccine, and not having enough information.
Schools
So when will all kids be back in school? The latest CDC announcement would seem to pave the way for mask-less in-person learning. Local teacher unions have faced criticism for being slow to agree to reopen and requesting enhanced safety measures like a new ventilation system. The American Federation of Teachers (AFT) president, a union representing 1.7 million educators, said that “schools must be open” entirely in the fall. Accordingly to ATF president Randi Weingarten, AFT members are 89% fully vaccinated or want to be. Weingarten suggested that reopening by fall is “not risk-free” and emphasized the need for continued masking by teachers and students and appropriate social distancing. Wait, what?
Public schools have mostly eschewed in-person schooling during the pandemic, while private schools have typically embraced it. A survey conducted by the journal Education Next found that while 60 percent of private school students were receiving in-person instruction, only 24 percent of traditional public school students were in the classroom. In some places, such as Los Angeles, private schools were prohibited by law from opening in person. The share of private students physically in school would have likely been even higher otherwise. Alas, the education gap continues to widen. Congratulations, teachers’ unions, on your “victory;” your short-sightedness and self-interest continue to disappoint me.
INTERNATIONAL POLITICS
Middle East History
Israel, which is about the size of New Jersey, was established as a nation on May 14, 1948. Israelis and Palestinians have been in a violent conflict since its creation. In 1947 after WWII was over, the United Nations decided to partition Palestine into two countries: the Jewish State of Israel and the Arab State of Palestine. Israel agreed to the partition, and borders were drawn for the two states, but many Arabs thought the division favored the Jewish people. The US supported the plan, but the British, who held a colonial mandate for Palestine until May 1948, opposed creating a Jewish state and an Arab state in Palestine and unlimited immigration of Jewish refugees to the region. Still, on November 29, 1947, the United Nations adopted Resolution 181 (also known as the Partition Resolution) that would divide Great Britain’s former Palestinian mandate into Jewish and Arab states.
Geography & War
Many Jews, Muslims, and Christians view Israel and the surrounding land as sacred based on cultural and religious history. Geographically, Israel is surrounded by Arab nations on all borders—Lebanon, Syria, Jordan, and Egypt. Immediately after Israel’s formation, the Arab league formed and disputed the UN-determined geographic boundaries and attacked Israel one day after its formation. That conflict would be become known by Israel as the “War of Independence.” Israel fought five Arab nations to preserve their land and even took control over much of the territory once delineated as Palestinian. Egypt took control of what became known as the Gaza Strip, and Jordan would control West Bank. The surrounding Arab states refused to recognize Israel, and the dream of a Palestinian state crumbled. Consequently, the outcome and new territory boundaries displaced approximately 700,000 Arabs, and the refugees took shelter in the Gaza Strip and West Bank.
The most significant change to Israel’s frontiers came in 1967, with the conflict known as the Six-Day War. The spoils of that conflict left Israel in occupation of the Sinai peninsula, the Gaza Strip, the West Bank, East Jerusalem, and most of the Syrian Golan Heights—effectively tripling the size of territory under Israel’s control. Israel annexed East Jerusalem, claiming the whole of the city as its capital. The international community did not recognize these moves until the US changed its official position on the matter under the Trump administration, and the embassy moved to Jerusalem. Overwhelmingly, the international opinion continues to consider East Jerusalem and the Golan Heights as occupied territories.
Egypt became the first Arab country to recognize the Jewish state in 1979 in exchange for Israeli troops and settler withdrawal from the Sinai peninsula, a process completed in 1982. That left Israel in the Gaza Strip, East Jerusalem, and the Golan Heights, with its official frontiers still delineated by the 1949 armistice lines. In 1994, Jordan became the second Arab state to recognize Israel, formalizing its long border with the Jewish state in the process. While there has not yet been a peace treaty between Israel and Lebanon, the two countries’ 1949 armistice line serves as Israel’s de facto northern border, while Israel’s border with Syria (and the Golan Heights) remains unsettled.
Gaza Strip
The Gaza Strip , sandwiched between Israel and Egypt, is just 25 miles long and six miles wide, and the ~2 million population is predominately Sunni Muslim. The land was part of the British-ruled Palestinian Mandate before Israel’s creation. Initially, the UN allocated this area to the Palestinians to create an Arab state. Still, that area fell into Egypt’s control during Israel’s War of Independence and then fell back into Israel’s rule after the Six Days War in 1967.
Israel withdrew troops and settlers from Gaza in 2005 after a violent Arab intifada. In 2006, Hamas won the Palestinian elections. Hamas, a Sunni Islamist group, is considered by many to be a terrorist group because they shelter suicide bombers and call for the destruction of Israel. Despite Israeli withdrawal from the Palestinian populated land, most governments consider Gaza to remain occupied by Israel. The Jewish nation maintains direct external control over Gaza and indirect control over life within Gaza: it controls Gaza’s air and maritime space and six of Gaza’s seven land crossings. More importantly, Gaza is dependent on Israel for its water, electricity, telecommunications, and other utilities, and Israel and Egypt imposed a crippling blockade on Gaza after Hamas’ rise to power. The trade closure, along with years of misrule, has devastated Gaza’s economy. Unemployment hovers around 50%, power outages are frequent, and water is badly polluted. In 2017, Hamas called for the formation of a Palestinian state that respected the 1967 borders but did not acknowledge Israel as a nation, so the initiative failed. Palestine continues to be without a nation-state. As a result, the battle with Israel rages on, with the primary disputes being the status of Jerusalem, rights of refugees, and increased Jewish settlements in Palestinian lands.
Conflict This Week
This week’s fighting is the escalation of clashes between Palestinians and Israeli police at a holy hilltop compound in East Jerusalem during the final week of the holy month of Ramadan. The site is revered by both Muslims and Jews. Hamas demanded Israel remove police from the location and the nearby predominantly Arab district, where Palestinian families face eviction by Jewish settlers. Hamas launched rockets at Israel when its ultimatum went unheeded, and top militant commanders were killed during Israeli airstrikes. Palestinian militants have fired more than 1,500 rockets at Israel. Israel says its American-financed “Iron Dome” missile defense system has intercepted many of those strikes. The escalation, which began on Monday, triggered street violence in Israel between Jews and Israeli Arabs. (Palestinian Arabs make up about 20% of Israel’s ~8.5 million population.) Israel responded by hitting “strategic targets” in the Gaza territory. Israel warplanes have struck more than 600 sites in Gaza , sometimes densely populated civilian areas. Palestinians say the Israeli military has warned civilians by phone to evacuate the buildings ahead of a strike.
The death toll paints a one-sided picture: some 122 Palestinians have been killed since fighting began on Monday, including 31 children and 20 women and 900 others wounded, while Israel has reported seven deaths, including a 6-year-old child. Prime Minister Benjamin Netanyahu said Israel would continue attacking Palestinian militant groups and Hamas said it’s ready to respond to a possible ground invasion. Israel has faced criticism for launching attacks that kill civilians. Still, the Israeli army argues that it is Hamas’ fault because the organization places its infrastructure and weapons within civilian areas, sometimes inside churches and schools.
This week’s conflict is Israel’s worst civil unrest in decades. This skirmish marks the fourth round of major conflict between Israel and Hamas since 2008. The tiny area’s more than 2 million Palestinian residents bear the brunt of deaths and destruction. The worst was the 2014 war that lasted for 50 days and killed some 2,200 Palestinians , more than half civilians. Seventy-three people were killed on the Israeli side. Beyond the death toll, Israel’s airstrikes into Gaza have left vast swaths of destruction, with entire neighborhoods reduced to rubble and thousands forced to shelter in UN schools and other facilities. Of course, Palestinians have fired thousands of rockets at Israel. Although Israeli defenses have intercepted most, the attacks generate widespread fear and make day-to-day life in Israel unsettling. The bottom line is more than 70 years after Israel declared statehood, its borders are not settled, and peace remains out of reach.
US POLITICS
Congresswoman Liz Cheney was fired this week from her position of conference chair. Three months ago, House colleagues voted 145 to 61 to support her after facing criticism for validating the 2020 election results. Cheney became emboldened after that vote and continued to air grievances against Trump. She emphasized that the 2020 elections were free and fair, and she called out colleagues who supported the “big lie.” She lost support from colleagues over the last few weeks, a clear sign that Donald Trump maintains a stranglehold on the party. Critics of Cheney felt she should have focused on pushing back on the Biden policies, namely the lower than expected jobs report in April, the multi-trillion infrastructure plan and ballooning national debt, and the crisis at the border. Cheney embraced her downfall, warning the GOP of Trump and his policies. The House voted today to elevate Congresswoman Elise Stefanik of New York to replace Cheney as conference chair. Stefanik, a high-profile Trump defender, had the support of House GOP leader Kevin McCarthy, Minority Whip Steve Scales, and Trump. Not all Republican House members are pleased with the move. More than 100 influential Republicans plan to release a call for reforms within the GOP alongside a threat to form a new party if a change isn’t forthcoming. The push will include 13 yet-to-be-revealed principles that the signatories want the GOP to embrace.
ECONOMY
Gas Shortage
The Colonial Pipeline operates 5,500-miles of pipe from Texas to New Jersey and provides ~45% of the region’s fuel shut down last Friday after a massive ransomware attack. The FBI confirmed a Russian criminal gang known as the Dark Side is responsible for the cyberattack. Dark Side is described as a ransomware-as-a-service platform, which vets cybercriminals who desire to infect companies with ransomware. Annual revenue is estimated to exceed $15 billion. Experts say ransomware attacks will continue to grow in sophistication, frequency, and cost unless something is done to disrupt the ability of crooks to get paid for crimes. According to a report from Coveware , the average ransomware payment in Q3, 2020 was $233,817, up 31% from a year prior. Emsisoft found that almost 2,400 US-based governments, healthcare facilities, and schools were ransomware victims in 2020.
Colonial Pipeline paid a $5 million ransom to hackers who caused the shutdown. The company restarted pipeline operations Wednesday and said it was resuming service throughout the entire system. However, energy analysts said it would likely take days before gas supplies return to normal in the Southeast. This crisis is the second energy-related incident to expose the vulnerability of our nation’s infrastructure. In February 2021, the state of Texas suffered a major power crisis, which came about as a result of three severe winter storms sweeping the US, leaving millions of customers without power during freezing temperatures. Both incidents offer a playbook to terrorists and bad actors for how to attack our nation. According to the Peter G. Peterson foundation, the US spends more on defense ($732 billion) than the next ten countries combined. But how much of that is dedicated to cyber? Not enough.
Jobs
New jobless claims fell to 473,000 , the lowest level since the start of the pandemic. Job losses are still higher than their pre-pandemic levels—the 2019 weekly average was 218,000. Job growth is not yet keeping pace with the lack of job losses, as employers added only 266,000 jobs in April, far less than the one million anticipated. The rate at which workers quit their jobs—a proxy for confidence in the labor market— held steady at 2.4% in March , matching a record high for data tracing back to 2000. Employers are shifting from “how do I keep my staff on the payroll” to “how do I retain my key staff and hire qualified workers?” Employers argue that the additional $300 weekly benefit for unemployment benefits is encouraging people not to work on top of regular state benefits.
Consequently, the lack of available workers to meet surging demand is limiting production and growth. There are 12 states with Republican governors who have announced they will stop paying additional pandemic unemployment benefits in June or July to get workers to take available jobs. A total of 16.9 million people were receiving benefits at the end of April through one of several programs, including regular state aid and federal emergency programs put in place in response to the pandemic. Total claims are down about 3 million from the first week of March, but still nearly eight times as high as before the pandemic’s onset. President Biden said workers remain on the sidelines for fear of getting sick during the pandemic and lacking full-time child care. It seems like the perfect time to require vaccination—now that we’ve established it works—as a condition for receiving government unemployment benefits.
Inflation
One abundantly clear thing, prices are rising. Higher commodity prices deliver economic windfalls to countries that supply metals vital to the global recovery from the pandemic. Prices of iron ore and copper both hit record highs this week as trillions of dollars of stimulus deployed globally push up demand for metals. It is a case of history repeating itself for export nations such as Australia and Chile, which benefited from heavy infrastructure spending by China and other countries striving to recover from the financial crisis more than a decade ago. (Australia accounts for more than 50% of global iron-ore exports.) Rising prices help commodity-producing countries by delivering more tax revenue. From the US to Russia to countries in the Middle East, oil producers could benefit from a similar trend. One key oil market benchmark, Brent crude , is up more than 30% this year.
Other materials have soared in price in the last year. Gas prices are up more than 60% from a year ago, in part due to a shortage of qualified drivers of trucks. Lumber futures hit a record high , a staggering sevenfold gain from April 2020. The increase in lumber is contributing to a shortage of housing and raising the price of new homes. There is a chicken shortage. Independent eateries and bars have gone weeks without wings, owners say. According to market research firm Urner Barry, chicken breast prices have more than doubled since the beginning of the year, and wing prices have hit records. Used car prices have skyrocketed. According to JD Power, across the US, used car prices in April rose to an average of nearly $25,500. That’s the highest price ever recorded by the research firm, which began tracking used vehicle sales in the early 1980s. That figure is up 17% since the beginning of the year. Plus, there’s a microchip shortage that has slowed the production of new cars, sending more would-be buyers to the used car market. On Wednesday, the Labor Department reported that US consumer prices last month rose at their fastest pace since 2008. Overall, prices were up 4.2% from a year ago.
OTHER
Trading has boomed in cryptocurrency while volumes in stocks and derivatives have tumbled, with an increasing number of day traders and institutional investors setting their sights on more speculative assets. Last month, a slowdown in equities trading contrasted with a frantic first quarter, during which activity jumped in stocks like GameStop and AMC. Monthly data from exchanges, and public filings, indicated retail investors, who had helped fuel the surge in trading for much of last year, turned their attention to betting in cryptocurrency markets. Trading on major crypto exchanges surged from less than $100 billion in April 2020, to $1.7 trillion last month, per data from The Block Crypto.
I. Below are the articles I found interesting the past week:
II. Stats that made me go WOW!
- In 2011, only 8 percent of Americans believed “there are other countries that are better than the US,” according to Pew Research Center. But that proportion rose to 21 percent in 2019 , and it is even higher—36 percent—among 18-29 year-olds (up from 12 percent in 2011). For young voters on the left, it rises to 47 percent.
- Research suggests that about a fifth of the 775,000 US troops who have served in Afghanistan suffer from depression and PTSD. More than 45,000 veterans or service members have died by suicide since 2013.
- New homes cost $36,000 more because of an epic shortage of lumber.
- According to Fair Issac Corp, the creator of FICO credit scores, some 53 million adults in the US don’t have traditional credit scores.
III. Name that Tune!
As I write this email, I am listening to “Safety Dance” by Men Without Hats.
Men Without Hats are a Canadian new wave and pop band founded in Montreal, Quebec, in 1977. The group’s popularity is based on a single hit song, Safety Dance, released in 1982 as the second single from Rhythm of Youth. Lead singer Ivan Doroschuk wrote the song after being kicked out of a club for pogo dancing. The pogo is a dance where the dancers jump up and down. Pogo dancing is most associated with punk rock and is a precursor to moshing. Sex Pistols bassist Sid Vicious claimed that he invented the pogo sometime around 1976 at shows in the early days of London’s punk scene.
Doroschuk explained that the song Safety Dance is a protest against bouncers prohibiting dancers from pogoing to 1980s new wave music in clubs when disco was declining. The song peaked on the US charts at number 3 in 1983 and stayed on the Billboard Hot 100 for 24 weeks. The Safety Dance found similar success in other parts of the world, entering the UK charts and peaking at number 6, and entering the New Zealand charts and peaking at number 2 in early 1984. The song was a massive success in South Africa, reaching number 1 on the charts. The song has been inducted into the Canadian Songwriters Hall of Fame (it’s a small club).
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